Intel reported a 98% rise in net income to more than $3.5 billion for the second quarter ended July compared to the same period last year, and analysts expect growth of up to 10% in the second quarter.
But in the Europe, Middle East and Africa (EMEA) region sluggish business demand could have seen the competition eroding the saturation of the once dominant CPU company.
The EMEA region contributed 22% of Intel`s worldwide revenues, down from 27% in the first quarter of the year and 25% this time last year, while the growth in terms of units shipped remained high. The Americas contributed 43%, Asia-Pacific 26% and the remaining 9% came from Japan.
"In EMEA we see consumer demand, but not yet companies employing the e-business tools they need," says Maria Marced-Martin, the company`s VP of sales and marketing and GM of EMEA operations. Intel traditionally has fiercer competition from chief rival AMD in the more price-sensitive consumer sector, while claiming dominance in the more lucrative business and server markets.
Intel says medium and large companies in the region are developing e-business strategies, which it hopes will move into the deployment phase in the second half of this year.
Although specific information for SA is not available, Marced-Martin says it is the dominant African market and could lag less than two years behind Western Europe in computer usage. Western Europe, she says, has a computer penetration of 21%, expected to grow to more than 40% by 2002. The demand is driven mostly by the Internet and companies adopting e-business.
However, markets with less Internet activity have also shown consistently high PC demand, adds Marced-Martin. "Mature markets generally show big demand because of the Internet, but we are also seeing emerging markets with growth rates of up to 50%." She notes that PCs are used in such regions mainly for education and developmental work.
Intel reported sales of $8.3 billion, up from $6.75 billion last year. Almost $7 billion of that was derived from the Intel Architecture Group, responsible for microprocessors, motherboards and chipsets. Some $1.35 billion was derived from its other operations, including the wireless communication and computing group, its network communications group and the new business group. These operations reported an $850 million loss.
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